Pithing Needle affects cards regardless of what zone they're in. This includes cards in hand, cards in the graveyard, and exiled cards. For example, a player can't cycle Eternal Dragon or return an Eternal Dragon from his or her graveyard to hand if Pithing Needle naming Eternal Dragon is on the battlefield.

6/1/2005

You can name any card, even if that card doesn't normally have an activated ability. You can't name a token unless that token has the same name as a card.

6/1/2005

If you name a card that has both a mana ability and another activated ability, the mana ability can be activated but the other ability can't be activated.

10/1/2009

Once Pithing Needle has left the battlefield, activated abilities of sources with the chosen name can be activated again.

10/1/2012

Activated abilities include a colon and are written in the form “[cost]: [effect].” Triggered abilities and static abilities of the named card work normally.